Rate of nonprofit job recovery slows significantly in April

In our continuing effort to track the ongoing impact of the coronavirus pandemic on nonprofit employment, this report documents our estimates of COVID-induced nonprofit job recovery and losses through April 2021, as reflected in the April BLS Employment Situation Report. Following a major rebound in March, BLS data showed only marginal growth in overall private employment in April, totaling just 218,000 private, non-farm jobs nationwide during the month. Of these, the majority accrued to the leisure and hospitality industry, a field in which nonprofits represent only a small fraction of overall employment. In addition, two of the major nonprofit fields—education and health care—saw overall employment losses in April, reversing a positive showing in March.

In Part 1 of this report we provide an overview of nonprofit job changes since February 2020 and spotlight the changes over the most recent month. In Part 2 we detail the recovery of nonprofit jobs over the past several months and where that leaves nonprofit employment as of April 2021; and in Part 3 we provide an updated estimate of the time it will take the nonprofit sector to return to pre-pandemic employment levels.

Part 1 | Change in nonprofit jobs in April 2021

As shown in Figure 1, April saw only a small gain of under 18,000 nonprofit jobs compared to March 2021’s total—representing a gain of just 2.2 percent of the nearly 830,000 jobs still lost as of March.¹

Of particular note is the loss of nearly 14,000 jobs in the educational field in April, a decline of 5.7 percent during the month, partially reversing a significant gain in March. The health services field also lost jobs during April, dropping employment in that field by nearly 1 percent as compared to March 2021. However, all other fields gained workers during April 2021, with the largest gains registered in the hard-hit arts, entertainment, and recreation field, which gained nearly 14,000 jobs, increasing employment in this field by over 12 percent from where it stood in March. Religious, grantmaking, civic, professional, and similar organizations also saw a significant 12 percent rebound in April, adding over 9,700 jobs over the previous month; and social assistance organizations regained nearly 9 percent of their workforce, adding nearly 9,300 jobs during April.

Part 2 | Tracking the recovery of nonprofit jobs through April 2021

Prior to the onset of the COVID-19 pandemic, nonprofit institutions accounted for at least 12.5 million total jobs. As reported in our 2020 Nonprofit Employment Report, during the first three months of the pandemic (i.e., March, April, and May 2020), we conservatively estimated that nonprofits had lost 1.64 million of those jobs, reducing the nonprofit workforce by 13.2 percent as of May 2020. This section examines the progress made by nonprofits in recovering those lost jobs over the ensuing months.²

As shown in Figure 2, in June, July, and August 2020, significant shares of the initial 1.64 million lost nonprofit jobs were recovered, regaining a combined 40.6 percent of these lost jobs. Beginning in September 2020, however, this recovery slowed significantly, with the months of September 2020-February 2021 seeing a combined recovery of only 4.2 percent overall. While March 2021 posted the most significant gain seen since the summer of 2020, that growth was not sustained in April, with April’s 18,000 recovered jobs representing a recovery of just over 1 percent of the estimated 1.64 million jobs lost during the first three months of the pandemic. Thus, over the 11-month the recovery period (i.e., June 2020-April 2021), nonprofits have recovered a combined 50.6 percent of the jobs lost as of May 2020, leaving a long way to go to return to pre-pandemic employment levels.

April 2021 presented a mixed bag in terms of the recovery rate for the various fields of nonprofit activity, with two fields—arts, entertainment, and recreation, and religious, grantmaking, civic, and professional organizations—improving significantly on their March recovery rates, while social assistance organizations held steady. However, with fresh losses during April, the recovery rate for both health care and educational institutions fell into the negative column. Nonprofit educational institutions in particular took a significant step back, losing 4.3 percent of the initial 323,000 jobs lost in that field during the first three months of the pandemic. [Editor’s note: visit the original post to access field-level data.]

As of April 2021 the nonprofit workforce thus remained down by over 811,000 jobs, leaving the nonprofit workforce 6.5 percent smaller than its pre-pandemic size, as shown in Figure 3. These lost jobs include nearly 28 percent of all workers in nonprofit arts and entertainment organizations; 13 percent of nonprofit education workers; 8.5 percent of all workers in nonprofit religious, grantmaking, and civic associations; 6.3 percent of workers in nonprofit social service institutions; and 3.5 percent of nonprofit health care workers.

Part 3 | Months to recovery at recent rates

Following the procedure laid out in our December report, we have updated our estimates of the possible time to full recovery of nonprofit employment back to pre-pandemic levels. To do so, we assumed that the average rate of nonprofit job recovery over the previous months (July 2020 through April 2021) would prevail over the foreseeable future. With an estimated 811,315 nonprofit jobs still lost from February 2020 through the end of April, and an average of 45,892 nonprofit jobs recovered per month, this suggests it would take the sector 18 months—or 1.5 years—to return to its pre-COVID level of employment, as shown in Figure 4. This estimate holds steady from our March projection.

Also shown in Figure 4 are the recovery rates of nonprofit employment in the various fields of nonprofit activity using the same approach, but with one notable exception—education—which had, prior to March 2021, seen only marginal month-over-month gains. In light of the Biden Administration’s prioritization of school reopening and its push to speed up vaccinations for education workers, we anticipated that this previous record of exceedingly slow improvement in this field would likely turn around quickly. To account for these hopeful trends, we combined an upper-bound estimate based on the average job gains in this field over the full 11-month recovery period (i.e., June 2020-April 2021, for an average of 5,853 restored jobs per month), with a lower-bound estimate based on just the three months of June, July, and August, which witnessed the first truncated effort to open schools and which saw an average of 46,773 jobs restored per month. Our combined estimate of these two projected growth paths yields a current estimate of just under 10 months until nonprofit education employment returns to its pre-COVID level, a delay of two months from our March estimate, pushing full recovery well beyond the opening of the 2021-22 school year.

Conclusion

March 2021 saw the largest overall recovery of nonprofit jobs since August 2020, but as we noted at the time, this recovery would need to be sustained for a significant period to restore nonprofit employment to pre-pandemic levels. Unfortunately, April’s jobs report was far less hopeful, with the recovery rate declining and the key fields of education and heath care losing additional jobs despite generally positive trends in vaccination rates in most of the country. What is unclear is whether this indicates a long-term trend back to the anemic growth rates seen throughout the winter, or whether this will prove to be a blip as the evidence of expanded vaccination rates, the decline in infection rates, and the benefits recently enacted by Congress fully click in and begin to create greater certainty in the minds of the population that general recovery and successful reduction of COVID-19 dangers are here to stay.

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1. Our March update found that, as of March 2021, nonprofit job losses stood at an estimated 828,038. However, BLS revisions for February and March resulted in a new estimate for March, which we have incorporated in Figure 1. BLS monthly revisions result from additional reports received from businesses and government agencies since the last published estimates and from the recalculation of seasonal factors. For more information, see: U.S. Bureau of Labor Statistics April Employment Situation Report (5/7/2021).

2. To estimate nonprofit job losses, we began with the latest available Bureau of Labor Statistics (BLS) data on nonprofit employment by field, which cover 2017, and calculated the nonprofit shares of total private employment by field as of this date. We then applied these shares to the monthly changes from pre-COVID (i.e., February 2020) levels in private employment by field as reported in the monthly BLS Employment Situation Reports to derive our estimates of monthly changes in nonprofit employment by field, such as those reflected in Figures 1 and 3 of this report. For more on these estimates, see: Salamon & Newhouse, “The 2020 Nonprofit Employment Report,” Nonprofit Economic Data Bulletin no. 48 (Baltimore: Johns Hopkins Center for Civil Society Studies, June 2020).

Reprinted from the Johns Hopkins Center for Civil Society Studies.